Flow and Duration of Funds

Flow of Funds

When considering applying for a grant (sponsored project) or accepting gifts from U.S. or international sources, it is necessary to understand the logistics and implications for the way these funds might be sent and received:

Origin (U.S. or International)

Funds can be accepted from countries outside the U.S. The University department should vet the origin of funds with regards to legal and regulatory requirements with the Office of the General Counsel as early as possible.


Receiving funds directly in the U.S. ensures that the University can use existing resources to:

→ Manage reporting and bookkeeping

→ Ensure grant is accounted for appropriately

→ Document expenditures

→ Ensure payouts are in accordance with process

→ Minimize the university’s exposure to sovereign risks

→ Minimize vulnerability to political and social events

→ Minimize exposure to local bank risks

Absence a compelling reason, it is Columbia's practice to receive grants and gifts in the U.S. and in U.S. dollars (US$).


Funds could be received by the University in several ways.

→ The vast majority of federal awards are funded under letters of credit administered by Sponsored Projects Finance (SPF) based on reports of reimbursable charges in the Accounting and Reporting at Columbia (ARC) system.

→ Some federal and many non-federal agencies remit payments to the University based on fixed payment schedules.

→ Some sources may transfer funds to the University upfront, but funds are replenished to the department's account based on the expenditures and projected needs that are documented through ARC.

The cycle for spending and replenishing funds is established by agreement with U.S. banks and government or donor institutions. Through this cycle, the University recovers administrative costs for the central operations that support these programs. In instances when grants or gifts originate from international sources, the added step of moving funds between countries needs to be incorporated into the regular operational needs of the program (including the lag time due to wiring internationally) and it must incorporate a process to collect the funds to cover both department and central costs.


Receiving the funds in U.S. dollars ensures that the University can:

→ Maximize cash and liquidity management centrally

→ Minimize the university’s exposure to Foreign Exchange (FX) currency risk

FX and Currency Fluctuation Risks

A sponsored project’s budget is a financial estimate of the project’s statement of work and is recorded in the Accounting and Reporting at Columbia (ARC) system in U.S. dollars (USD). However, many expenses will be incurred locally at the host country and in local currency, which will result in variance to the budget.

It is necessary to review foreign exchange rates, for the host country currency on a regular basis in order to anticipate impact to the budget. It is recommended that you create a revised budget closer to award stage (also called “Just-in-Time” stage), as currency exchange rates may have changed since your original proposed budget. Additionally, Departments are responsible to develop and adjust program budgets so that the impact of currency fluctuations are covered through anticipated sponsor payments. Keep in mind that there could be fluctuations after the end of program operations and before the receipt of final sponsor payments, which can take months. Departments are cautioned to monitor fluctuations and adjust budgets throughout the life of sponsored projects.

Funding Duration

Long-term projects and sites may have difficulty repatriating funds to the U.S. If it is necessary to fund or capitalize an international project beyond what is necessary for immediate expenses, first consider how to recover any unspent funds that may remain at project’s end. The program budget must include all costs associated with the closing and exit of the program from the host country.

For additional details on these costs, see the Special International Costs page.

For assistance, contact the Office of the Treasurer's Cash Management and Operations Team (Cash Team).

For Questions Contact

For questions regarding funding

flow, please contact Cash Team

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